Cutting edge, the need of the hour for the self starter - a clinical study on Uber cabs

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Abstract

Human brain, the incubator for ideas that make the new ventures stand out in a crowd, like a leader in a pack with products and services inspiring and creating awe. Concepts developed by start-ups that are intuitive, instinctive and inventive suiting the contemporary world rivalling and outclassing the big conglomerates and becoming huge success stories. Fringing the boulevard of ideas with a plethora of dimensions are the daring self starters who help themselves to come out of the corporate cubicle that remains a conundrum forever. The buzz word for today is ‘start up’ characterized by massive technological changes and the incursion of the information and communication technology into business in a very large way. We are living in a transition economy, in an ever changing dynamic environment it becomes imperative to grab at opportunities with both the hands and convert them into potential businesses that define not only the fine art of survival but aid in sustaining for life.

The author through this conceptual paper has tried to explore the elements of creativity and innovation in entrepreneurship with the help of a clinical study on Uber technologies Inc.. A business model that has wrapped itself around the customer requirements and linking these demands to real time supply thereby monetizing its revenues and letting the company drive the change in modern day transportation.

Key words: Creativity, innovation, start up, Uber cabs and business model

                                                                   

Introduction

India is presently ranked 3^rd among the global start-up ecosystem, the total funding in the year 2016 was a whopping 5 billion dollars which has seen a massive 125% increase from 2014, over 110 incubators in the country at this moment in time, which churn out brilliant innovative ideas and this number  is 40% more than the previous year and 28 years is the average age of the aspiring start-up founders and 4200 technology driven product start-ups which is a quantum leap in a matter of just 4 years (courtesy – NASSCOM’s study titled Start-up India – Momentous Rise of the Indian Start-up Ecosystem)¹. These imposing statistics reveal the grand picture of the entrepreneurial story that is inspired by an environment with digital technology, a one billion mobile using population marked by a high spectacular growth of investor ecosystem and immensely successful start up ventures that are epitomes for many to follow and emulate.

Entrepreneurial ventures are phenomenal Industry leaders today and companies such as Flipkart, Oyo, Grey Orange have become true icons for many who have quit the cosy corporate cubicle and headed towards creation and innovation. India is truly a mobile nation, trendy and ever changing transforming and adapting itself to a technology driven country that has seen a spurt in the E commerce business. A burst of activity in the small business enterprises scene galvanized by information and communication technology has further strengthened the hold on the market. This market is typically characterized by an explosion of smart phone users and an ambience which is fully loaded with Government initiatives that do a yeomen service in promoting bank financing for start-ups through Start-up India and this platform also promotes entrepreneurial businesses through sponsoring large number of events, giving away awards to the imminent industry houses, coverage platforms that help in recognition and networking apart from giving the necessary impetus to a vibrant science and technology resourceful people ready to take the plunge. (Exhibit #1)

Entrepreneurs of today are exposed to a never before experience in the form of visits to companies who have carved a niche for themselves, showcasing the products that have stolen the limelight through their innovative business models. Business models entail plans of action that are the core of any business activity such as scouting for a customer base which will necessarily include the past, the present and the potential buyers and users and scanning for the vital input in the form of sources of funding, undoubtedly the lifeblood of any organization. The foundations on which these models operate are accuracy, efficiency and rationale of the plan that creates operates and delivers on its desired objectives and goals. Customized business models have caught our attention and the entrepreneurs are the prime movers of such designs that are utilitarian and dynamic. Entrepreneurs analyze, investigate and survey the market mechanism to fine tune the vital ingredients of contemporary business viz. contact, connect and collaboration.^b

The viability and feasibility of an entrepreneurial venture rests on an application that is pioneering, a first of a kind product or service that is ground breaking and avant garde. Through this paper, there has been a concerted attempt to observe and understand a mobile based application that is typically a new service which is pragmatic and constructive and leaning heavily towards cutting edge technology precisely customized for the customer. From the days of direct one on one interaction through field sales men which may have been to a certain extent effective and translated into revenues, but very time consuming, cumbersome and expensive thereby increasing the cost of customer acquisition, to the modern era of a drift towards sharing economy and collaborative consumption. This business model compensates and makes up for the acquisition cost as it is borne by a group of people and not by a single individual (Exhibit #2) 

Literature review:

«  The research study undertaken by Zinnov Research & Analysis for NASSCOM titled “Start-up India – Momentous Rise of the Indian Start-up Ecosystem” has been the foundation and backbone of this paper. The impact of technology in innovative and creative products and services for start ups is the mainstay of the study that touches upon why India is the start up nation. India is a country with a huge rise in incubators that accelerates the economic development through job creation. The fact that our country has risen to the 3^rd position in the number of start ups worldwide with huge potential for markets and support system is exhibited in this report. The connect that is established by these start ups with their respective industries due to networking and collaboration is demonstrated through this review and research. The  insights provided by Zinnov are extremely useful and actionable.

Research methodology:

The author through this conceptual paper has tried to explore the elements of creativity and innovation in entrepreneurship with the help of a clinical study on Uber cabs company. A business model that has wrapped itself around the customer requirements and linking these demands to real time supply thereby monetizing its revenues and letting the company drive the change in modern day transportation.

Objective of the research paper:

ü  An overall perspective of creativity and innovation in entrepreneurial ventures

ü  A brief study on shared and collaborative economy with the help of a clinical example

ü  Emphasis on the business model, is this the cutting edge that Uber has. 

ü  To understand whether rational thinking overrides efficiency and effectiveness

                                                         

Introduction about the company

UBER,  the word has a very interesting connotation; it means a business model that offers services on demand through a network or connect between the customer and supplier established via mobile technology and UBER TECHNOLGIES INC. has cleverly adopted the name for its car transportation system worldwide.

How it all started....UBER - Finding the way - Creating possibilities for riders, drivers, and cities

Founded by Travis Kalanick and Garrett Camp in 2010, when they failed to get a cab to reach their destination, a typical example of an invention arising out of necessity has travelled far and wide in a span of about 8 years. A simple tap and get a ride service that has bailed most of us out when stranded and securely reached us to our most favoured destinations with abundant use of technology. This app based collaborative customer model applies an adaptable and responsive user friendly interactive platform and the impact is threefold - For cities, the business bolsters the local economy; for people – there is increased and improved mobility with safer mode of travel and for commuters- no more hassles of driving in crowded and congested cities. (Exhibit #3)

Discussion:

With one billion connections across 630 odd cities and counting, Uber has created opportunities through a peer to peer economy comprehensively. A simple three step process is all what it takes to ride a cab and here’s how,

Ø  Request -Tap each ride option to see wait time, size, and price. Then enter pickup location and tap request—the cab arrives in minutes.

Ø  Ride – the drivers’s and the cab’s details are displayed in the app along with the rate depending on the distance and type of car chosen

Ø  Pay – digitally or through cash

Seamlessly woven into the app are other features such as “Send Status” that lets friends and family know where the rider is, that too in real time, “Split Fare”, a component that allows the cost of the ride to be shared with any contact who uses Uber and “Fare Estimate” which gives an almost precise idea as to how much the trip is going to cost that reinforces the dynamics of a collaborative gig economy.  

It has adroitly incorporated the “sharing economy” concept of pooling resources by transacting online with the skilful use of information and communication technology to bring closer, customers and other businesses in order to find better ways to move, work and thrive. Apart from the ease and convenience of getting a safe and cheap ride with the Expected time of arrival (ETA) feature blended through Google maps and navigation. There is also the added advantage of a business opportunity of becoming a driver with flexible timings and good earnings thereby generating employment opportunities which is a take away from an entrepreneurial venture. It also effortlessly fuses the speed, reach and connectivity aspects by locating the vehicle closest to the booking point. It has served the community well by influencing people not to drive when under the influence of alcohol and also infused the “pool” concept to curb excess traffic on roads. The rewards, discounts, gift cards, offers and pay backs on this business model has touched upon neuromarketing stimulating the brains to respond in a positive way, a rational thinking that surpasses any other marketing tactic.

  With a staggering 300 million smart phone users, Uber has a vice like grip on customer collaboration and brilliantly used the power of free to enhance and suck the potential customers to its fold spiking sale of services manifold. The invasion of technology along with the internet and the World Wide Web has simplified the process of finding users for resources that are drawn to a single point and the dissemination of costs over a wider target audience makes it more synergetic. (Exhibit #3)

 Kickstarting the start up...

·         Launched in the year 2010 in San Francisco, marketing was initially carried out through word of mouth through events among the tech community

·         Giving free rides to participate in such events

·         Later on spread through social networking sites worldwide

·         Discounts and other forms of promotions to customers for retention and expansion

The technology behind the app...

1.      Identifying a device’s location

§  The Uber app for iOS uses the CoreLocation framework to locate a user’s device.

§  Geolocation for the Android version of the Uber app was implemented using Google’s Location APIs

2.      Providing driving directions

§  To display point-to-point directions on a map within the app, developers of the Uber app for iOS used MapKit

§  Android routes and directions are made possible by the Google Maps Android API.

3.      Integrating with mapping software - implemented Google Maps for

§   iPhone

§  Android versions of their app

4.      Push Notifications and SMS

§  Uber text messages are powered by the Twilio telecommunications provider

§  push notifications in the iOS app -  Apple Push Notifications Service

§  For the Android app - Google Cloud Messaging (GCM)

5.      Payment integration

§  Uber uses a cashless system- debit or credit card, or a promo code.

§   This removes any human-to-human cash transfers from the equation, including tips.

§  Uber takes 25 percent of a driver’s fare, which makes for a rather profitable business model

6.      When accepting card payments, there are certain requirements that companies must comply with.

§  The Payment Card Industry Data Security Standards  is a set of requirements designed to ensure    that all companies that process, store, or transmit credit card information maintain a secure e  environment. In effect, this applies to any merchant that has a Merchant ID (MID).(Exhibit #4)

Requirements.....

·         Design

·         Smart phone with 4G compatibility

·         iOS and Android native app development

·         Backend development

·         Web development

·         Project management

·         Quality assurance

·         Training for the drivers

Benefits of Uber

1)   High Quality Service

2)   Ultimate flexibility

3)   Fair Pricing System

4)   Easy to Use and Understand

5)   Meeting new people

6)   No boss overseeing

7)   Seeing new things

8)   Cost reduction

9)   Discounts, promotions and paybacks

Disadvantages

1)   Like any job, uber driving has its ups and downs

2)   Work/fares can be slow when you want them to be busy

3)   An ineffective rating system

4)   Surge pricing

5)   No insurance claims

6)   Little recognition from the management/boss
Wear and tear on car

7)   Seeing how stupid drunk people are

Conclusion:

The conceptual study in this paper has revealed that creativity and innovation in entrepreneurship is linked with the rampant and excessive use of technology in today’s world. Business model is the starting point of a successful venture and this is wrapped around the customers. The cutting edge for UBER is the technology that it has unleashed and the mind engineering to convert people to users is pragmatic thinking and neuromarketing in a collaborative economy. The dimension of creativity and innovation in entrepreneurship in contemporary business such as Uber is vividly brought out in the clinical study undertaken. The prudence and opportunism of neuromarketing is analyzed through this paper and it is observed that pragmatic thinking is here to stay.

References:

a)      http://www.sciencedirect.com/science/article/pii/S0048733309001668 - What do business models do?: Innovation devices in technology entrepreneurship by.LilianaDoganova and.MarieEyquem-Renault.

b)      https://link.springer.com/article/10.1007/s10997-010-9154-1

Internationalization, innovation and entrepreneurship: business models for new technology-

based firms Alberto Onetti, Antonella Zucchell maand Marian V.

c)      http://www.snia.org/sites/default/files/SDCIndia/2016/Presentations/10K-NIPP%20Intro_%20SDC.pdf http://www.nasscom.in/

d)      http://www.ey.com/Publication/vwLUAssets/ey-the-rise-of-the-sharing-economy/$FILE/ey-the-rise-of-the-sharing-economy.pdf

e)      http://www.forentrepreneurs.com/category/business-model/

f)       http://www.investopedia.com/terms/s/startup.asp

g)      https://www.neurosciencemarketing.com/blog/articles/the-power-of-free.htm

h)      https://yalantis.com/blog/uber-underlying-technologies-and-how-it-actually-works/

i)        https://www.uber.com/en-IN/

j)        https://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy

k)      https://www.fastcompany.com/3046119/defining-the-sharing-economy-what-is-collaborative-consumption-and-what-isnt

l)        https://www.wired.com/2008/02/ff-free/

m)    www.zinnov.com